Locked-out Lake Erie workers denied employment benefits

NEW YORK  Some 1,000 hourly workers locked out at U.S. Steel Corp.s Lake Erie Works in Nanticoke, Ontario, could face mounting financial pressure after Canadas federal government denied them employment insurance benefits.

United Steelworkers union Local 8782 was notified July 4 that Service Canada had decided to "disentitle" the insurance benefits related to being locked out of the steelmaking facility.

"The union strongly believes this was strictly a political decision and certainly not based on the facts or merits of the situation the workers face with a global company such as U.S. Steel and the manipulation of production levels south of the border in depressed market conditions," the union said in a statement.

The USW said it would file a formal request for reconsideration to Service Canada to initiate the appeal process for workers.

The lockout by the Pittsburgh-based steelmaker is approaching its 10th week after negotiations between the two parties failed at the end of April. While market participants previously indicated that the volume of production curtailed by the lockout was not significant enough to impact U.S. Steels overall supply/demand balance in the short term, the companys automotive business reportedly has been stronger than expected.

The strength in autos, coupled with a reported delay in slab shipments to other mills by U.S. Steel due to the loss of melt capacity at Lake Erie, have contributed to the recent upward momentum in steel prices, sources said.